Brand wagon effect: How brand equity eclipses the effect of eWoM on purchase intentions – Mediating role of review helpfulness

Abstract

As a result of digitalization, consumers have more agency than in earlier times. Consumers now have the ability to express their consumption experiences through diverse online platforms by means of rating or providing written feedback. The ability to effectively decipher online customer reviews (OCRs) holds significant importance for businesses due to its far-reaching consequences. This research aimed to determine if review valence (RV) (the degree to which reviews are extremely positive or negative) was transmitted to purchase intentions via review helpfulness within the framework of signaling theory and cue-diagnosticity theory. The research also examined the presence of negative bias among customers when evaluating the valence of online customer reviews (OCRs) and its signaling ofreview helpfulness. Further, to determine if such an effect occurs within the boundaries of brand equity, an experimental study was conducted sequentially on two products: mobile phones and laptop computers. The study did not find negative bias among consumers concerning the assessment of RV. Further, the study supports an indirect effect of RV on purchase intention through review helpfulness. In addition, the results demonstrate that the referred effect is fully mediated by review helpfulness. Moreover, the results indicate that such an indirect effect is contingent on the brand's equity. The findings indicate that the RV has a significant effect on purchase intentions, particularly when brand equity is low. The study also discusses the study's managerial and research implications.